The first Secondary Highway 527 was a local highway in the District of Muskoka that connected Baysville to Huntsville. Highway 527 was first depicted on a Preliminary
Route Plan prepared by the Department of Highways of Ontario (DHO) in May, 1956. The route, which had been known previously as the Huntsville-Baysville Road, was
designated by an Order-in-Council dated May 9, 1956. Highway 527 was approximately 14 miles (22.5 km) in length. The highway was already paved at the time of
designation in 1956. The entire route of Highway 527 was under the jurisdiction of the DHO, except for a short section of the highway lying within the Town of
Huntsville. The section of Highway 527 from Highway 11B (Main Street) to the former town limits near Townline Road was under municipal jurisdiction. This non-assumed
section of the highway was designated as a Municipal Connecting Link by an Order-in-Council, effective October 9, 1958. Apart from some minor realignments of the
highway in certain locations, the route of Highway 527 remained more or less unchanged until the 1970s.

Up until 1971, there was no intermediate road agency between the DHO and the local townships within Muskoka District. The creation of the District Municipality of
Muskoka on January 1, 1971, changed the way road services were administered within the District. As a result, many of Ontario's Secondary Highways lying within the
District were transferred to this newly-formed tier of municipal government, particularly those which served as local access highways. Since it served mostly a local
function, jurisdiction over Highway 527 was transferred from the province to the new District Municipality of Muskoka, effective April 30, 1972. The former Municipal
Connecting Link section of Highway 527 through Huntsville was formally revoked by an Order-in-Council, effective February 2, 1972. Although the first route of
Highway 527 ceased to exist in 1972, another unrelated Highway 527 was established in Northwestern
Ontario north of Thunder Bay in 1976.